Ex-Jefferies trader free to appeal conviction

A federal appeals court has determined that Jesse C. Litvak, a former senior trader at the Jefferies, can stay out of prison while he appeals a conviction of defrauding investors in mortgage-backed securities.

Litvak was found guilty in March of deceiving customers about the prices of mortgage-backed securities he sold to them after the financial crisis. Giving the case unusual significance was the fact that prosecutors claimed that the United States government was a victim, because some of Mr. Litvak’s clients were managing money that was part of the Treasury Department’s Troubled Asset Relief Program, or TARP.

A federal jury in New Haven, Conn., convicted Mr. Litvak on 15 criminal counts, including 10 of securities fraud, making him the only person convicted of fraud related to the TARP program involving investments in mortgage-backed securities. He was sentenced in July to two years in prison. His lawyers vowed to appeal the conviction.